McDonald’s and 41 Other Franchises That Could Make You Rich

If you dream of opening your own business, join the crowd. About two-thirds of Americans said they want to start a small business, according to The UPS Store’s “Inside Small Business Survey.”

However, if you’re like many of the people surveyed, fear of failure is one of the biggest obstacles to following through on your dream. And who could blame you for being afraid? About half of small businesses fail within five years of launching, and about two-thirds fail within 10 years, according to the Bureau of Labor Statistics.

Given the failure rate of new businesses, it’s not surprising that many aspiring business owners opt to become a franchisee rather than launch their own operation. According to Franchise Direct, 1 in 7 businesses is a franchise. If you buy a franchise, you get the benefit of operating an established brand with a proven system. But – as the International Franchise Association cautions – buying a franchise is no guarantee of success.

That’s why it’s important to consider franchise options carefully before investing in one. With costs varying widely, you want to ensure you get the most bang for your buck. To help, GOBankingRates analyzed Franchise Direct’s top 100 franchises of 2019 to identify those most likely to be lucrative based on their track records, startup costs and ongoing fees. They’re ranked from least to most likely to be financially successful.

GOBankingRates considered only U.S.-headquartered franchises and used five factors from Franchise Direct to rank each franchise:

• Overall rank of a franchise in Franchise Direct’s top 100 list
• The average initial franchise fee for each franchise
• The average estimated initial investment minus the average franchise fee
• The royalty fee, which is a regular payment made to the franchisor that is a percentage of gross sales
• Advertising or marketing fee

If you’re thinking about buying a franchise, find out which ones are more likely to make you rich.

Last updated: Jan. 27, 2020

Chili's

• Average franchise fee: $50,000
  
• Average initial investment minus franchise fee: $2,693,500
  
• Royalty fee: 1.25% of gross profit
  
• Advertising fee: 7.00% of gross profit

Read: 19 Franchise Opportunities for $200K or Less 

Red Robin

• Average franchise fee: $35,000
• Average initial investment minus franchise fee: $2,955,000
• Royalty fee: 5.00%
• Advertising fee: 2.50%

TGI Fridays

• Average franchise fee: $50,000
• Average initial investment minus franchise fee: $3,165,500
• Royalty fee: 4.00%
• Advertising fee: 4.75%

Carl's Jr.

• Average franchise fee: $25,000
• Average initial investment minus franchise fee: $1,839,000
• Royalty fee: 4.00%
• Advertising fee: 7.00%

Hardee's

• Average franchise fee: $28,750
• Average initial investment minus franchise fee: $1,739,750
• Royalty fee: 4.00%
• Advertising fee: 9.75%

Krispy Kreme

• Average franchise fee: $18,750
• Average initial investment minus franchise fee: $1,456,500
• Royalty fee: 4.50%
• Advertising fee: 9.50%

International House of Pancakes (IHOP)

• Average franchise fee: $50,000
• Average initial investment minus franchise fee: $3,544,037
• Royalty fee: 4.50%
• Advertising fee: 3.50%

Little Caesars

• Average franchise fee: $17,500
• Average initial investment minus franchise fee: $876,600
• Royalty fee: 6.00%
• Advertising fee: 7.00%

Church's Chicken

• Average franchise fee: $15,000
• Average initial investment minus franchise fee: $1,245,225
• Royalty fee: 5.00%
• Advertising fee: 5.00%

ServiceMaster Clean

• Average franchise fee: $64,750
• Average initial investment minus franchise fee: $202,903
• Royalty fee: 10.00%
• Advertising fee: 1.00%

Popeyes Louisiana Kitchen

• Average franchise fee: $50,000
• Average initial investment minus franchise fee: $1,452,150
• Royalty fee: 5.00%
• Advertising fee: 5.42%

Papa John's

• Average franchise fee: $12,500
• Average initial investment minus franchise fee: $422,960
• Royalty fee: 5.00%
• Advertising fee: 8.00%

7-Eleven

• Average franchise fee: $500,000
• Average initial investment minus franchise fee: $108,300
• Royalty fee: 7.50%
• Advertising fee: 1.00%

Johnny Rockets

• Average franchise fee: $25,000
• Average initial investment minus franchise fee: $842,500
• Royalty fee: 5.00%
• Advertising fee: 6.50%

Petland

• Average franchise fee: $40,000
• Average initial investment minus franchise fee: $632,500
• Royalty fee: 4.50%
• Advertising fee: 5.00%

Edible Arrangements

• Average franchise fee: $25,000
• Average initial investment minus franchise fee: $248,525
• Royalty fee: 5.00%
• Advertising fee: 5.00%

Long John Silver's

• Average franchise fee: $15,000
• Average initial investment minus franchise fee: $845,875
• Royalty fee: 5.00%
• Advertising fee: 5.00%

Once Upon a Child

• Average franchise fee: $25,000
• Average initial investment minus franchise fee: $294,200
• Royalty fee: 5.00%
• Advertising fee: 5.00%

Wingstop

• Average franchise fee: $10,000
• Average initial investment minus franchise fee: $568,266
• Royalty fee: 6.00%
• Advertising fee: 4.00%

Find Out: 24 Restaurant Chains That Will Disappear 

Marco's Pizza

• Average franchise fee: $17,500
• Average initial investment minus franchise fee: $457,139
• Royalty fee: 5.50%
• Advertising fee: 8.50%

Charleys Philly Steaks

• Average franchise fee: $24,500
• Average initial investment minus franchise fee: $393,275
• Royalty fee: 6.00%
• Advertising fee: 3.00%

Smoothie King

• Average franchise fee: $27,500
• Average initial investment minus franchise fee: $526,518
• Royalty fee: 6.00%
• Advertising fee: 5.00%

AAMCO

• Average franchise fee: $39,500
• Average initial investment minus franchise fee: $237,550
• Royalty fee: 7.50%
• Advertising fee: 4.00%

Bojangles' Famous Chicken 'n Biscuits

• Average franchise fee: $25,000
• Average initial investment minus franchise fee: $1,973,217
• Royalty fee: 4.00%
• Advertising fee: 4.00%

Dairy Queen

• Average franchise fee: $35,000
• Average initial investment minus franchise fee: $1,435,325
• Royalty fee: 4.00%
• Advertising fee: 5.50%

Orangetheory Fitness

• Average franchise fee: $57,450
• Average initial investment minus franchise fee: $723,875
• Royalty fee: 8.00%
• Advertising fee: 2.00%

Taco Bell

• Average franchise fee: $35,000
• Average initial investment minus franchise fee: $1,653,650
• Royalty fee: 5.50%
• Advertising fee: 4.25%

KFC

• Average franchise fee: $45,000
• Average initial investment minus franchise fee: $2,062,050
• Royalty fee: 4.50%
• Advertising fee: 4.50%

A&W Restaurants

• Average franchise fee: $22,500
• Average initial investment minus franchise fee: $718,500
• Royalty fee: 5.00%
• Advertising fee: 5.00%

Circle K

• Average franchise fee: $12,500
• Average initial investment minus franchise fee: $1,258,445
• Royalty fee: 5.25%
• Advertising fee: 1.00%

Pizza Hut

• Average franchise fee: $25,000
• Average initial investment minus franchise fee: $1,260,250
• Royalty fee: 6.00%
• Advertising fee: 4.75%

Moe's Southwest Grill

• Average franchise fee: $30,000
• Average initial investment minus franchise fee: $694,374
• Royalty fee: 5.00%
• Advertising fee: 2.00%

Dunkin'

• Average franchise fee: $65,000
• Average initial investment minus franchise fee: $781,450
• Royalty fee: 5.90%
• Advertising fee: 5.00%

Auntie Anne's

• Average franchise fee: $30,000
• Average initial investment minus franchise fee: $262,288
• Royalty fee: 7.00%
• Advertising fee: 1.00%

Related: These Five-Star Restaurants Are Worth Every Penny

Subway

• Average franchise fee: $15,000
• Average initial investment minus franchise fee: $206,475
• Royalty fee: 8.00%
• Advertising fee: 4.50%

Burger King

• Average franchise fee: $32,500
• Average initial investment minus franchise fee: $1,770,850
• Royalty fee: 4.50%
• Advertising fee: 4.00%

Domino's Pizza

• Average franchise fee: $5,000
• Average initial investment minus franchise fee: $330,975
• Royalty fee: 5.50%
• Advertising fee: 6.50%

Arby's

• Average franchise fee: $18,750
• Average initial investment minus franchise fee: $1,143,625
• Royalty fee: 4.00%
• Advertising fee: 4.20%

GNC

• Average franchise fee: $30,000
• Average initial investment minus franchise fee: $239,176
• Royalty fee: 6.00%
• Advertising fee: 3.00%

The UPS Store

• Average franchise fee: $19,950
• Average initial investment minus franchise fee: $284,282
• Royalty fee: 5.00%
• Advertising fee: 2.50%

Baskin Robbins

• Average franchise fee: $18,750
• Average initial investment minus franchise fee: $228,925
• Royalty fee: 5.90%
• Advertising fee: 5.00%

McDonald's

• Average franchise fee: $22,500
• Average initial investment minus franchise fee: $1,319,000
• Royalty fee: 4.00%
• Advertising fee: 4.00%

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• 21 Smartest Ways To Invest Your Money Right Now

Methodology: GOBankingRates looked at Franchise Direct‘s Top 100 Franchises of 2019 across five factors to determine the top 42 franchises that could make you rich. The following factors were considered and sourced from Franchise Direct’s list: (1) overall rank; (2) average of the low- and high-end initial franchise fees; (3) average of the low and high total initial investment minus the average franchise fee; (4) the percent of gross sales that will be deducted for royalty or service fees; and (5) the percent of gross sales that will be deducted for advertising or marketing fees. To be considered for this list, the company offering the franchise had to be headquartered in the United States and have all the data for the factors readily available. All factors were scored and combined, with the lowest composite score resulting in a higher ranking. In the final scoring, factor No. 1 was weighted 3/4 times. All data was compiled and is up-to-date as of Jan. 10, 2020.

About the Author

Cameron Huddleston

Cameron Huddleston is an award-winning journalist with more than 18 years of experience writing about personal finance. Her work has appeared in Kiplinger’s Personal Finance, Business Insider, Chicago Tribune, Fortune, MSN, USA Today and many more print and online publications. She also is the author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances.

U.S. News & World Report named her one of the top personal finance experts to follow on Twitter, and AOL Daily Finance named her one of the top 20 personal finance influencers to follow on Twitter. She has appeared on CNBC, CNN, MSNBC and “Fox & Friends” and has been a guest on ABC News Radio, Wall Street Journal Radio, NPR, WTOP in Washington, D.C., KGO in San Francisco and other personal finance radio shows nationwide. She also has been interviewed and quoted as an expert in The New York Times, Chicago Tribune, Forbes, MarketWatch and more.

She has an MA in economic journalism from American University and BA in journalism and Russian studies from Washington & Lee University.

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